With consolidation on the rise and incentives for the food and beverage sector to reduce operating costs and increase cash flow, switching to solar power has become a way for companies to accomplish both while also becoming energy efficient and environmentally responsible. Manufacturers and distributors of food and beverage products that occupy commercial buildings, particularly those with large roof tops, can benefit from the installation of solar panels. A number of pioneers such as Campbell’s Soup, Mars Snackfood, US Foods and Del Monte Foods, have already installed panels on many of their buildings.
Various federal and state tax credits are available to companies who install solar panels to generate energy, allowing these companies to quickly recapture their investment, and making converting to solar even more attractive. The federal government allows taxpayers a 30% investment tax credit on the net system cost, which can be used to offset regular and alternative minimum tax. Any unused portion of the credit can be carried forward to future years. In addition, certain states allow a tax credit against income tax and property taxes. Solar panel installation costs can also be depreciated over 5 years using an accelerated depreciation method against the approximately 25 year determined life of a solar panel.
Other various rebates and incentives are available to businesses based upon the production levels of solar power. Many businesses actually receive payments from their local utility provider due to “net metering” – the process of putting energy back into the power grid when the solar panels produce more than the building uses. Rebates and incentives vary state to state but these can be predetermined by the installer prior to any outlay of expenses.
While commercial solar power is not for everyone, it is worth considering and often provides a strong return on a minimal investment. If you believe solar energy is an option for your business, please contact us for more information and to discuss the applicable tax credits available in your area.